Real Estate Principles Practice Question
Question
A broker reviews a transaction file with a new salesperson in a Nevada real estate transaction involving settlement. What should the licensee understand? (Item 348)
Answer choices
- A. The rule applies only to commercial property and never to residential property.
- B. The broker may mix client funds with business funds if the amount is small and later reconciled.
- C. The issue can be ignored if both parties want the transaction to close quickly.
- D. Recognize prorations, closing entries, and transaction cost allocation.
Correct Answer
D. Recognize prorations, closing entries, and transaction cost allocation.
Explanation
The correct answer is D because settlement requires candidates to recognize prorations, closing entries, and transaction cost allocation. The other options rely on unsafe assumptions about custom, oral agreement, escrow, client preference, or independent salesperson authority and do not reflect sound Nevada exam practice.
Question details
- Difficulty: hard
- Domain: Real Estate Principles
- Objective: settlement